Joint Committee on Draft Communications Bill Report


(II) SPECIFIC RESTRICTIONS ON OWNERSHIP

227. Notwithstanding the more flexible plurality test which we recommend, there is advantage in specifying where specific prohibitions on ownership should be retained. The Government proposes to maintain the current prohibition from holding broadcast licences on bodies whose objects are wholly or mainly of a political nature, affiliated bodies and the officers of such bodies.[422] This is because the Government is not satisfied that "a political organisation could run a broadcasting company with the necessary impartiality".[423] We have received no evidence to suggest that this is other than a very sound judgement.

228. The Government does, however, propose to lift two other types of prohibition. Local authorities are currently the subject of a general prohibition on ownership.[424] Clause 231 would lift that prohibition solely in respect of television and radio services used by local authorities to provide information services to the communities they represent.[425] The Association of Local Government Communications welcomed this proposal, considering that it would support local authority powers contained in the Local Government Act 2000 to promote the well-being of their locality, to develop the role of community leaders and to promote a local community vision.[426] Both the National Union of Journalists and the Newspaper Society expressed concern about this change, in the light of its possible effects on democratic debate and the proper use of public money, and in view of the potential conflicts of interest relating to advertising content.[427] It is important that the Government clarify, before detailed consideration of the final Bill, how it envisages the broadcasting licensing enforcement regime and the governance systems relating to local government working together in order to ensure proper oversight of broadcasting services provided by local authorities.

229. The Government also proposes to lift altogether the prohibition on ownership of broadcast licences by advertising agencies.[428] It proposes to do so because it considers that competition law will enable competition authorities to ensure effective regulation of the advertising market.[429] BECTU, the National Union of Journalists and Channel 4 all expressed concern about the proposed lifting of the restriction.[430] We share their concern; there is an unquestionable conflict of interest between ownership of an advertising agency and of a commercial broadcast licence. We recommend that the prohibition on the holding of broadcast licences by advertising agencies or groups which own advertising agencies be retained.


422   Broadcasting Act 1990, Schedule 2, Part 2, para 1 (1) (d) to (hh); Media Ownership Rules, para 6.1.2. Back

423   Policy, para 9.3.2. Back

424   Broadcasting Act 1990, Schedule 2, Part 2, para 1 (1) (c). Back

425   Policy, para 9.3.2; EN, para 391. Back

426   Ev 438, para 3.1. Back

427   Ev 520, para 4.2; Ev 370, para 27; Q 941. Back

428   Clause 264 (1) (b). Back

429   Media Ownership Rules, para 6.1.2; Policy, para 9.3.2. Back

430   Ev 332, para 9; Ev 520, para 4.2; Ev 204, para 4.32. Back


 
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Prepared 31 July 2002